Stanford business professor Robert Sutton has made bullies and jerks his niche. His popular 2007 book, The No Asshole Rule: Building a Civilized Workplace and Surviving One that Isn't, made reading about bad management both thought-provoking and fun.

Now Sutton is back with a new book, Good Boss, Bad Boss: How To Be the Best and Learn From the Worst, which uses real-life companies and examples to reveal what makes good bosses tick and bad bosses tick people off. Sutton sat down with Entrepreneur to discuss the book and give stressed-out entrepreneurs a few insights into the elusive art of self-awareness.

Entrepreneur: What do you want people to learn from Good Boss, Bad Boss?Sutton: Writing The No Asshole Rule subjected me to a bunch of stories about bosses. One of the kinds of bosses that people found most troubling was when they had a really nice boss who was really incompetent. That's a very difficult situation to be in. So my book isn't just about jerks or "bossholes," if you will. It's about all kinds of incompetent or competent bosses.

What's the worst boss horror story you've heard so far?
There are so many of them! But one that amazes me still is [a company] that sold motivational-type stuff -- which is sort of ironic -- and this [boss], concerned that sales were down, got really excited at a company picnic and literally waterboarded a guy. He took a jug, poured water down the employee's throat and said, "See how hard this guy is struggling? That's how hard I want you to work to make sales!" He was actually a fairly well-liked guy; he just lost control.

Do you think managing employees comes naturally to most small-business owners?
People who have worked up through a company know what it's like to be the boss, and many entrepreneurs come from other companies so they know what it feels like. But when it's their venture, they have a very hard time understanding why other people aren't as excited about it as they are.

How has the Great Recession changed employees?
When there's a bad economy and employees have jobs they don't like, they just lie in wait. They've got an eye on the exit at all times. This is a big warning for entrepreneurs, especially now if they're not paying people as well and they're not giving them the respect and dignity they deserve. There are people who are smart enough to act polite and work hard every day, but will run for the exits when they get other employment opportunities.

How can the boss's attitude rub off on employees?
Human behavior is infectious. When I look at successful startups, very often the boss has a long-term perspective. Another thing that's very important is the notion of energizing. Some people are energizers and other people are de-energizers. After talking to a de-energizer, people tend not to be as energized, feel less good about themselves, are less willing to work as hard, and are less creative. I think of Bill Campbell, who was the CEO of Intuit. He had employees' backs so much that none left during the wind down of [computing company GO], during the internet boom when they all could have gotten jobs. They remain loyal to him to this day.

Do entrepreneurs need to be more aware of how employees perceive them?
Awareness is learning how to listen. It sounds easy, but it's actually pretty hard. It's also encouraging employees to come to you with bad news. Teach your employees to fight with you in a way that's constructive. When you fight in an atmosphere of mutual respect, you can flesh things out. It's a very high level of art as a manager to be able to fight with people and have them love you even more because you know how to fight.

What's the key to being a good boss, and how does an entrepreneur become the best boss someone's ever had?
If I were to ask three questions, the first one is: Do you know how to push without being a jerk? Second, after someone talks to you, do they feel like they have more or less energy? And third, do employees feel like the boss has their backs? These questions go back to self-awareness. Do you know what it's like to work for you?

Any parting words for entrepreneurs managing employees day-to-day in these tense economic times?
Give the people who work for you a sense of why you're doing things and some sense of predictability about what lies ahead, either positive or negative. When employees have a boss who keeps shocking them without any forewarning, they get nervous. A little predictability is something most people want.